Travel company the Thomas Cook Group has today said it could put its airline business unit up for sale in a bid to raise more than £1 billion to pay down debt, according to reports.
The company said it had begun a “strategic” review of the airline to “increase financial flexibility and accelerate execution of our core strategy”. It could sell all, or just part, of the airline arm.
The troubled travel agent saw its operating loss increase by £14 million year-on-year to hit £60 million for the three months to the end of December as holiday bookings dropped.
While Thomas Cook as a whole may be struggling, the airline itself is seen as profitable. It made earnings before financing costs and tax of £129 million last year, up 37 per cent on 2017 although it reported a loss in the last three months of 2018.
The group’s airline division operates 103 aircraft, of which a quarter serve long-haul destinations, and carried more than 20 million passengers in 2018.
City analysts reportedly speculate that the Thomas Cook Group present finances are unsustainable. Last year it made profits of just £12 million on sales of £9 billion.
The move comes as many airlines are going bust, Germania the latest this week and others like Flybe and Wow Air have sought cash injections elsewhere and Norwegian and others are struggling. Ryanair last week also reported lower financial figures.
Thomas Cook’s airline assets include Thomas Cook Airlines UK, Thomas Cook Airlines Balearics, Thomas Cook Airlines Scandinavia and Condor.
Thomas Cook chief executive, Peter Fankhauser said: “As expected the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun.
“Where summer 2018 books started very strongly, bookings for summer 2019 reflect some consumer uncertainty, particularly in the UK.“.
Thomas Cook also said today the future is uncertain “due to wider market uncertainty, particularly in the UK”.